Osman Rashid and Aayush Phumbhra are the co-founders of Chegg.com, a company that in 2007 started renting textbooks to college students. Students [or their parents] would pay a lot of money for college textbooks only to offload the used books at college stores at heavily discounted prices. “The textbook business was wildly inefficient,” said Mike Maples Jr., managing partner at Maples Investments, a fund that invests in young start-ups; it was one of Chegg’s first outside investors. The two entrepreneurs addressed this market inefficiency with their book rental website.
There is a ticker that shows how much money the website has helped people save. As of now: "SAVED SO FAR: US$40,271,719.29". Chegg also plants a tree for every book you rent, buy or sell and claims that to date, it has planted over 500 football fields worth of trees.
This to me is the best bit:
Chegg began renting books before it owned any, so when an order came in, its employees would surf the Web to find a cheap copy. They would buy the book using Mr. Rashid’s American Express card and have it shipped to the student. Eventually, Chegg automated the system.Fantastic. I love how the entrepreneurs came up with creative yet simple solutions to get their business off the ground. Lessons in there for Bloom!
But as the orders multiplied, Mr. Rashid said, so did the traffic on his credit card, leading American Express to suspect fraud and threaten to suspend the account. He said he persuaded American Express not only to keep the card active, but also to issue a couple of dozen more so Chegg could spread out the orders.
There is plenty of secret sauce to Chegg’s business, including logistics and software to determine the pricing and sourcing of books, as well as how many times a given book can be rented.